Signs of dramatic change are being seen worldwide; in some cases, years of change are occurring in a matter of weeks. While the COVID-19 pandemic continues to disrupt operating models across the insurance industry, new realizations are dawning in every sense. How do insurers digitally engage with customers? How do they digitize their processes? How do they remotely manage their workforce?

While most organizations have done relatively well maintaining operations in this environment, the true test will come when they must reinvent themselves, not only to survive now, but emerge beyond this period of uncertainty. If anything, this crisis is habituating people to buy online, make business decisions with limited data, and manage teams and relationships remotely.

In short, we are in the midst of a black swan event that no futurist could have predicted. We are already seeing the effects across the insurance value chain. While life insurance applications have surged, with some carriers reporting a 20-50% increase in monthly volume since February 2020, submissions for commercial and specialty insurance are down.

Meanwhile, insurers are seeing increased claims volumes, whether it be related to disability insurance or other lines, such as travel or business interruption coverage. Life insurers are facing challenges in underwriting, due to testing difficulties and high mortality rates. Personal line insurers are refunding premiums on auto policies, due to reduced trip mileage, and cancelling late payment charges. The impact on the entire value chain is significant, especially given that the industry has, for the most part, not embraced cutting-edge technology or processes.

Certainly, change management will be difficult, especially with remote-operating workforces in place. Still, the focus of CXOs to drive transformation, enhance business resilience and improve customer experience has never been greater.

Testing times often create major market shifts, so organizations that make smart moves now may emerge as winners later. Make no mistake, when this time passes, a new normal will be in place. This paper explores the fundamental question:


COVID-19 has Placed a Plethora of Challenges on Insurers, Not Only in How They Work, But Also on How They Interact with Consumers

  • Shifting consumer behaviors are influencing business models and operations industry-wide
    In the face of myriad pandemic-related restrictions, consumers have adapted to meet social, personal and essential needs. The increase in video conferencing apps provides just one example of such digital, low-touch, distance-less adaptation. Likewise, shopping habits have changed to emphasize digital channels for purchase and after-sales service, not only for products, such as food and clothing, but for insurance, as well. S&P Global Ratings reported earlier this year that the pandemic could increase awareness of insurance, as customers recognize their current protection gaps. Further, a recent LIMRA survey counted 24% of US companies experiencing an increase in online/mobile applications for life insurance in March.
  • Insurance companies are re-evaluating their business models, turning profits back to loyal customers in the form of rebates and investing in new customer-friendly products and digital channels
    Expert analysts suggest that the economic impact of the worldwide pandemic may be far greater than that experienced during the Great Depression. Insurers have had their business continuity and operational processes stress-tested in response to increased claims and policy service volumes, exacerbated by lower sales activity, and ongoing workforce health and safety concerns. A recent LIMRA survey found that many insurers are re-evaluating the end-to-end customer journey to better serve customers as a result of the pandemic. One in five US life insurers have postponed or waived paramedical requirements for new applications. Some say they have added questions on COVID-19 exposure and travel to the underwriting process; others are requiring good health statements, accepting electronic health records, and allowing historical exams and lab data in lieu of current exams, to cope with new social distancing norms. Auto insurers have introduced more affordable pay-per-mile car insurance. Liberty Mutual has announced a “Personal Auto Customer Relief Refund,” giving auto insurance customers 15% back on two months’ worth of annual premiums.
  • Data, analytics and social media have increased in significance
    Traditionally, life insurers required new applicants to get blood tests at a nearby test center or have a paramedical professional perform a basic check-up at the customer’s home. With social distancing norms in place, insurers are now relying on alternate data sources, such as historical medical records, data from pharmacies and online lab reports. Sales and marketing professionals have begun analyzing time spent on social networking platforms and streaming content behaviors to devise marketing plans and strategies, focusing more on social media, paid searches and online ads than traditional mailers.
  • Business continuity plans must also account for acceptable customer service levels
    Insurers are experiencing a surge in call volumes, especially in the areas of claims. These include disability- and absence-related claims, general policy enquiries related to regulatory changes, such as CARES and FFCRA in the US, and issues involving premium refunds and discounts. Strapped by a COVID-restricted workforce and local societal restrictions, insurers are struggling to keep the lights on, while also trying to maintain operational resilience. As a result, process prioritization, staff reorganization and efforts to encourage customers to use online or mobile channels versus live call-ins for assistance have all become common.
  • Remote working models are here to stay
    Before COVID, companies generally planned for disasters by shifting workloads to different locations or offices. Work-from-home (WFH) scenarios were not foreseen. Setting up widespread, home-based work environments to accommodate for a lack of systems, equipment, IT support staff, software and security had never been considered before. Many firms had to amend client contracts and gain government approvals before shifting employees to their homes. The technical challenges were most acutely felt as companies tried to stabilize their operations. While stabilization periods varied by company, the fact that many were able to adjust in weeks instead of years is most commendable.
  • Digitally mature companies have struggled less than their lagging counterparts
    Digitally mature insurers clearly demonstrated greater resiliency and ability to serve customers than their counterparts who lagged behind in technology adoption. The pandemic pushed consumers to accept digital options for raising service requests and communicating with advisors. It also proved advantageous for companies equipped with digitally advanced products, such as big-data-enabled underwriting, automated claims processing and voice- and chat-enabled customer service channels.

    330-year-old specialist insurance market, Lloyd’s of London, the world’s largest insurance hub, replaced its four-story “underwriting room” with an electronic trading system, Placing Platform Ltd (PPL), in 2016. Though PPL was at first slow to catch on, during the pandemic, it proved to be the market’s lifeline.

The Cost of Doing Nothing: Can Insurance Companies Go Back To Status Quo After COVID-19?

Judging by industry trends, analyst reports and investment plans published in Q1-2020, the changes instigated by COVID-19 are here to stay. In effect, we have reached the turning point for customer service, digital adoption by consumers and organizations, employee collaboration, working models and operational resilience. How organizations function and interact with customers and stakeholders in the future will be indelibly shaped by what occurs during this new age of long-term transformation. The cost of returning to older working models is too high to endure. Here are the key reasons why:

  • Competitive displacement by firms more willing to evolve
  • Threat from Insurtechs who are already ahead of the technology curve
  • Loss of business due to changing customer behaviors and expectations
  • Need to recover losses incurred during the crisis
  • Opportunity to re-vamp business models for improved market agility, speed and responsiveness

In short, organizations that learn from the crisis, and embrace it as an opportunity for overall reinvention, will meet the new normal with confidence and enjoy greater success moving forward than their counterparts.

Five Areas for Success in the New Normal

Moving on from COVID-19, new insurance operating models will need to be resilient, agile, distance independent, paperless and transparent.

  • Build Resilience – In a distance-independent business model

    As organizations define what the permanent shift from dedicated office space to “my workspace” will look like, striking the right balance between physical and contactless interaction will involve carefully considering the learnings from COVID-19. Gartner suggests that employers will need to embrace WFH accommodations for some corporate staff in order to gain greater flexibility and cost efficiencies.

    • IT Infrastructure and Support: A CNBC survey mentioned that 53% of organizations had never stress-tested their systems for an event like COVID-19. Having learned from the shortcomings of provisioning a fully remote workforce, the insurance industry would do well to fix the missing and dysfunctional pieces of their IT Infrastructure and enhance their overall network capabilities. New configurations would need continuous review for single points-of-failure, access controls and exceptions, and remote login credentials. Adequate IT support staff would be needed to ensure helpdesk capacity, with contingencies for key staff unavailability and alternate admin access to critical systems.
    • Enhancing Employee Experience: Investment would be required for all aspects of collaboration, remote-tooling, agent assistance/guidance, right-skilling and workflow to ensure a stable, agile, engaged and high-performing remote taskforce.
    • Enabling Operations Management and Oversight: As supervision and control lessens in a WFH setup, real-time monitoring of workforce productivity via SLA/performance dashboards would be required. Operations management would also require enhanced process quality checks to highlight deviations from agreed thresholds and ensure the right mix of staff working remotely vs. in existing office spaces.
    • Agile Contract Modifications in Light of Regulatory Rigor: Early COVID-19 contract modification models suggest the need for simpler, modular clauses to enhance operational agility. As remote working becomes widespread, the industry must anticipate new regulatory restrictions and data security guidelines. Any new security/privacy contract clauses would need to be reviewed for their commercial impact on the sustainable hybrid model and be ready for quick turnaround.
    • Rising Importance of Cybersecurity: On April 21st, IT giant, Cognizant, faced a security incident involving their internal systems, causing service disruptions for some clients due to a Maze ransomware attack. With phishing, ransomware and social engineering campaigns on the rise, the dynamic environment is more vulnerable than ever. In the rush to get connected, misconfigurations abound, leaving new devices exposed with default factory settings, increasing risk.

      Firms should emphasize tightening security protocols, maintaining strong cybersecurity practices and building a resilient working model. This will require improving identity management, network connectivity and endpoint security tools that can help prevent phishing scams and minimize security breaches. Insurers must detect areas of unacceptable risk, monitor and curb the usage of non-approved technology, and reiterate company policy.
  • Double Down on Digital Transformation – Invest in the ecosystem

    In a European market survey recently conducted by McKinsey, 70% of executives from Austria, Germany and Switzerland expected the pandemic to accelerate the pace of digital transformation. IDC projects that IT spending in infrastructure will grow by 5.3% and software investments will grow by 1.7%.

    Going ahead, insurance firms would do well to enhance self-service capabilities and digital document management, improve information security and compliance, deploy smart workflow management tools, automate repetitive non-core tasks and invest in quick-to-market product platforms as part of their technology modernization. These solutions could be enabled by in-house teams, managed service vendor engagements or Insurtech partnerships. In addition, a digital workforce toolkit should be scaled up to augment employee capabilities.

    Firms should also consider automation and digitalization as a means for additional revenue gains and not a mere cost reduction exercise; their absence can often result in loss of business, and any time saved can be applied to new business activities.

    Further, the use of AI and intelligent automation, alongside IoT and big data technologies, would allow insurers to streamline and enhance processes, such as:

    • Customer/Policyholder Interactions: Voice bots, chat bots and assisted live-chat providing personalized customer experiences, while minimizing labor-intensive, face-to-face interactions and manned calls
    • Pricing: Via real-time, dynamic, behavioral models
    • Underwriting: Speeding up and improving efficiency via digital data intake, auto classification and indexing, robust, rules-driven workflow and enhanced data-driven decision support for risk assessment
    • Claims: Augment First Notification of Loss (FNOL) and claims handler surveys using drones with advanced photo/video capture capabilities, along with advanced claims triaging and IoT-based, connected systems for advance risk detection
    • Fraud Management: Enable early detection and predict fraud patterns with advanced forensic capabilities to analyze data

    Shift to Cloud Services: Most insurers have lagged in this space, deterred by data security concerns or uncertainty over variable consumption costs of cloud-based services vs. fixed costs of on-premise servers. However, having systems in the cloud offers higher capacity and bandwidth, along with faster and responsive access from anywhere.

    Strengthen Value Chain and Ecosystem Partners (including distribution network, supplier/third-party network, claims TPAs and others): Insurers should invest in digital platforms to bring together workforce, customers, brokers and plan administrators, using technologies such as electronic placement platforms for brokers, modular agile product build solutions and integrated workflow tools.

  • Harvest the Power of Data and Analytics - To enhance performance and productivity

    Modern data and analytics tools aid in improving the accuracy of loss projections and producing real-time insights of events, opening up possibilities to maneuver through complexity and uncertainty akin to that experienced during the pandemic. Timely and accurate projections have cascading effects and material impacts on reserves, renewal premiums and terms and conditions. Hence, insurers who invest in big data analytics tools can showcase their ability to pay future claims and demonstrate the capacity to effectively underwrite risk.

    In spite of having access to large datasets, the industry still struggles to incorporate data insights into its business strategies, instead relying heavily on experience over data. Hence, the need to fix data silos, poor system integrations and outdated technologies becomes more eminent. As the industry enters the post-COVID-19 phase, it must address its general, “data rich, information poor” status.

    The role of analytics, aided by large volumes of external risk data, is crucial in helping insurance organizations track and mitigate large-scale events as they emerge, and develop real-time business intelligence on emerging risks.

  • Rip Out Bad Costs - Via rapid assessment and quick-deploy digital ecosystem

    As digital operations expand industry-wide, insurance firms must perform rapid assessments to remove avoidable human work, redeploying workers to higher-value activities, and zero-base their physical footprint. Operations re-design, with an overall shift to minimizing fixed costs, would drive core/non-core task prioritization to enable right-shoring models via managed services providers. As well, quickly building a digital ecosystem across geographically diverse teams will help fast-track the change.

    Firms should focus on reassessing and consolidating operations and claims adjusting partners, third-party supplier networks and other vendors based on capabilities stress-tested during the period of COVID-19.

    Still, human touch remains valuable when people need help. Therefore, agents, underwriters and customer-facing staff will require skills training to deal with the more complex customer needs that fall to their desks. However, human intervention should be integrated into the digital experience, rather than requiring a separate phone call.

  • Re-Invent and Differentiate – The customer value proposition

    • Modify the Product Portfolio: More than ever, insurers need to sharpen their value proposition, focus on product simplification and policy wording reviews, and accelerate risk-restructuring for new and modified insurance products (e.g., pay-per-use and enhanced coverage products).

    • Focus on Online Sales and Marketing Channels: IDC’s recent survey cited improvement in online marketing and business development as one of the top three positive impacts of COVID-19. Following the uptake of online placement platforms and CRM tools during the pandemic, it will be critical to stick to these efficient operating models for consistent online sales.

      Insurance companies will need to shift more towards social media and content marketing, SEO and influencer-led campaigns, as well as webinars, to reach new customers for more targeted engagement. The benefits and opportunities these digital channels demonstrated recently will make them essential to any long-term marketing plan. Marketers need to keep a closer watch on their accounts, search keywords and site analytics to identify shifts in customer needs. Marketing strategies should leverage email strategically, remain sensitive in messaging, and balance critical information with helpful articles and top-of-mind brand awareness content.

    • Invest in Digital Customer Experiences: As physical interactions become more infrequent, client-centricity will become critical for sustaining and enhancing customer experiences. Simple digital customer journeys, informed by moments-of-truth, and key customer interaction touchpoints, along with a 360°-degree customer view across disparate data sources, would be key to a seamless omni-channel customer experience.

Building the Roadmap for the New Normal

While it is clearly evident that digital technology will play a pivotal role in the “new normal,” some of the key questions that companies need to address when they begin their transformation journey are:

  • What is our organization’s vision and key digital goals?
  • What are the key focus areas and how do we start?
  • How do we assess our current state against industry benchmarks and create a roadmap?
  • How do we bring together all the various stakeholders and manage the change?

Assessing Future Readiness

Business processes and technology capabilities have been stress-tested during COVID-19. Using the learnings from this experience, insurers must assess their digital maturity and future readiness regarding:

  • WFH Enablement
  • Business Management
  • Operations Management
  • Digital Assets, Data and Analytics
  • Product Simplification

Based on an assessment of these key transformation pillars, firms should pursue any needed interventions to reach their desired target state. Prioritizing these interventions, by evaluating their business value against their implementation complexity, will result in an implementation roadmap aligned with target milestones.

Managing the Change

With the target state and roadmap established, effective change management will ensure a smooth transition. Consider these key change management principles moving forward:

  • Leadership vision and continued executive support, driving change from the top
  • Employee engagement and re-skilling
    • Ability to work effectively virtually, including physical and mental fitness
    • Adaptation skills to acclimate and adjust to changing job tasks and environments
    • Digital competence
    • Digital conflict management
    • Access to online training resources and services, including articles, whitepapers and webinars
  • Effective and continuous communication on the future state, with an eye on potential concerns
  • Designated change agents across each line of business to communicate the mission and vision

A Digital Center of Excellence: Executing the Vision through a Cross-Functional Transformation Team

Designing an end-to-end organizational view of business and operations is vital to enabling a reliable and sustainable transformation model. A Center of Excellence can serve as the governing body, managing demands across multiple lines of business, in step with larger organizational goals, and prioritizing projects along the transformation journey.


Prior pandemics and economic depressions have shown that companies that learn fast and demonstrate a willingness to disrupt their own business models will adapt to the changing environment and come out stronger. The current scenario is no different. Adapting to the new normal is the only option to succeed. Companies that avoid stagnation during a temporary downturn and continue to focus on the big picture, eventually drive exponential growth compared to competitors who merely focus on tactics.

Over the years, EXL has built solutions and frameworks that drive rapid outcomes for insurance firms, helping several large insurers assess their future and build hybrid workforces to meet the “new normal.” To learn more or explore your options, please visit



Mainak Bhowmik
Senior Manager, Insurance
Consulting, Life & Annuities, EXL

Ananya Phani
Senior Manager, Insurance
Consulting, Property & Casualty, EXL


Rohan Regis
Vice President, Insurance
Industry Solutions, EXL

Vikas Kapoor
Senior Vice President and Global Co-Head, Insurance
Property & Casualty, EXL


Garima Agnihotri
Manager, Insurance Consulting,
Life & Annuities, EXL



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